Stock Market Update Monday February 3, 2025

Stock Market Update Monday February 3, 2025 Stocks rebounded sharply mid-session after futures fell for the second consecutive Sunday night, but momentum faded by the close. Reports of trade progress with Canada improved sentiment in after-hours trading, lifting futures. The S&P 500 (SPX) closed down 0.75%, the Nasdaq 100 (QQQ) fell 0.8%, and the Russell 2000 (IWM) dropped 1.25%. Palantir (PLTR) surged 18% in after-hours trading after a strong earnings report boosted investor confidence.

Away From Stocks: Treasuries showed a mixed picture, with the 30-year bond yield declining six basis points to 4.77%, while the 2-year yield edged up to 4.26% from 4.22% on Friday, reflecting shifting rate expectations. WTI crude settled just below $73 per barrel, while gold climbed to $2,815 per ounce, underscoring investor demand for safe-haven assets. Bitcoin hovered near $102,000, holding steady after recent volatility. Meanwhile, the VIX added more than two points, closing near 19, signaling a slight uptick in market risk aversion.

Given the current market conditions, traders should prepare for ongoing volatility as macroeconomic and geopolitical events continue to unfold.

Volatility S&P 500 Index VIX Daily Chartcaption...

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Market Reaction to Executive Order on Tariffs:

This weekend, the White House issued an executive order that places tariffs on Canada, Mexico, and China. This announcement led to a notable drop in the stock market. Both stocks and digital currencies saw sharp declines in early morning trading, but managed to recover by the end of the day. The currency markets also reacted negatively, with the euro and British pound each losing roughly 1% of their value. In this unstable situation, many investors may perceive these tariffs as a bad economic indicator, prompting them to be more cautious. Yet, this response might stem from a misunderstanding.